The Limits of Lease Exclusivity

If you negotiate an exclusivity clause into your commercial lease, you likely assume your business is safe from neighboring competitors. However, a recent Nebraska Supreme Court decision serves as a crucial reminder: an exclusivity clause binds your landlord, not your competition.

In Bar at the Yard, LLC v. Friends Family, LLC (2026), the Court made it clear that Nebraska law protects legitimate business competition. Simply entering into a business deal, even if you know it might disadvantage a competitor, is not enough to trigger legal liability.

The case arose near Memorial Stadium in Lincoln, where two tenants leased space from the same landlord and sold alcohol on Nebraska Husker football gamedays. The Plaintiff, Longwells, operated a bar and held and exclusivity provision in its lease, giving it the sole right to sell alcohol in an outdoor common area. The Defendant, Hiro 88, operated a restaurant that began selling alcohol on game days through windows opening into the same common area, with the landlord’s permission.

Facing a hit to its gameday revenue, Longwells sued Hiro 88 for tortious interference. Tortious interference is a legal claim used when a third party wrongfully disrupts a business’s contracts or customer relationships. Longwells sought Hiro 88’s alcohol profits and a court order to stop their operations.

Both the district court and the Nebraska Supreme Court ruled in favor of Hiro 88, rejecting Longwells’ claims on two separate fronts.

First, Longwells argued that Hiro 88 wrongfully induced the landlord to breach the exclusivity provision. The Court rejected this argument. Under Nebraska law, inducement requires affirmative conduct that actively influences another party’s decision making. Simply

negotiating your own business deal, even if you are fully aware it might impact a third party’s existing contract, does not constitute inducement. Because there was no evidence that Hiro 88 did anything more than look out for its own business interest during negotiations, the claim failed.

Second, Longwells argued that Hiro 88 interfered with its reasonable expectation of serving all the alcohol-buying customers in the common area. The court dismissed this, holding the conduct fells within the competitor’s privilege. In Nebraska, businesses are free to compete for customers as long as they do not use improper or unlawful means. Longwells could not prove Hiro 88 crossed that line. In fact, the Court noted that choosing to operate only during peak, profitable hours reflects a strategic business decision rather than an illegal act.

The Court reaffirmed that Nebraska does not recognize legal liability based solely on one competitor making another’s business operations more difficult or costly.

For commercial tenants, this case illustrates a critical limitation of lease protections. Exclusivity provisions only bind the landlord who signed the lease. They do not automatically give you a shortcut to sue a competitor who never signed that agreement.

If a competitor moves into your space and violates your exclusivity terms, your strongest legal claim is almost certainly against your landlord for breach of contract. Before committing to costly litigation over a lease dispute, ensure you identify the correct target. If you are navigating a commercial lease dispute or looking to protect your business interest, contact our legal term to ensure your strategy aligns with current Nebraska law.

See Bar at the Yard, LLC v. Friends Family, LLC, 321 Neb. 606 (2026).